Administrators question use of Wavelength deposits 

While the sale of DeTrafford’s 421-home Wavelength site in Salford progresses, Kroll is investigating how £10.8m paid by investors for unbuilt apartments has been spent. 

An update on the administration of the DeTrafford Wavelength vehicle published by Kroll raises questions about the amount of money the company took from investors and states that “enquiries about the use of the deposits are underway.” 

Read the full report on Companies House

Around 300 investors paid between 10% and 30% deposits for flats in the development but no work has taken place, despite planning approval being secured in 2019. 

“The level of deposits taken by the company does not seem commensurate with the level of work completed on the site,” Kroll’s report states. 

“Requests have been made of other group companies and officeholders to establish the use of the deposit funds and a further update will be provided in due course.”

DeTrafford managing director Gary Jackson declined to comment when approached by Place North West. 

Kroll’s report states that around £1m of the investor money is held by law firm Slater Heelis. 

As well as apartments, some investors also paid deposits of £5,000 for furniture packs to DOK 82, according to Kroll. The company, whose sole director is listed as Gary Jackson’s son Kane, is in the process of being liquidated. 

As a result, money paid to DOK 82 by investors is unrecoverable, according to administrators.  

Selling the site 

Efforts to sell the Wavelength site to claw back some of the money owed to creditors is progressing. 

A preferred bidder for the Salford plot has been selected but work to clear the title must be completed before a deal can be finalised. 

With planning permission for 421 apartments, the Wavelength site, it could be assumed, was always likely to generate plenty of interest. 

However, when put up for sale prior to the collapse of the vehicle, the plot did not garner a single formal bid, according to administrators. 

Since the site became the subject of administration proceedings, interest in the opportunity has soared. 

Colliers, the team tasked with finding a buyer for the plot, received interest from more than 50 parties, eight of whom submitted formal bids. 

All of the bids were lodged on the condition that the land could be offered with a clean title, meaning it would be “free from the interests of secured creditors and investors”, according to an administrators report. 

The secured creditors include lender Whitecraig, owed £4.1m by DeTrafford, and the group of 300 investors who bought apartments off-plan. These investors are owed £10.8m, according to administrators.

In order for this to happen, the administrators will most likely have to apply for a court order pursuant to paragraph 71 of the Insolvency Act, which will see the title cleared, paving the way for a sale. 

Colliers whittled the eight bids down to four and are now in negotiations with an unnamed preferred bidder. 

On the basis that the sale goes through, administrators predict that all 139 investors that hold UN1s – a formal registration of interest in a property – that pre-date Whitecraigs charge will receive a distribution. The exact amount is yet to be determined but it is likely to amount to less than their original investment. 

Administrators also state that the value of the preferred bid means that Whitecraigs will not be paid in full and that there will not be “any money” available to the remaining investors, who either do not hold UN1s or whose UN1s were registered after Whitecraigs charge.